Americans have had it drilled into them that government is bad, but a new narrative is surfacing. Last Thursday, Roosevelt Institute Senior Fellow Jeff Madrick kicked off the Roosevelt Institute's new flagship initiative, Rediscovering Government, at an event in New York City, declaring, "There is no economy without government. There is no America without government. Government doesn't have a role; it is integral." In a keynote address, Roosevelt Institute Senior Fellow Joseph Stiglitz also argued that healthy societies have strong governments and that his research has shown that "the reason the invisible hand often was invisible was that it wasn’t there." Watch the full video of the opening remarks and keynote below:

Stiglitz says that "most Americans don’t realize that we are no longer the country of opportunity that we think of ourselves, that America today has less equality of opportunity than any of the other advanced industrial countries." He points out how many like to say that our economy is doing well because GDP is growing, but that "if you’re going to be judging how well an economy is doing, clearly I think the key metric that one wants to focus on is what is happening to the living standards of most citizens.” He says that most Americans don't realize how bad we're doing, including the fact that "the median income of a full-time male worker today is the same as it was in 1968," and "if you look at median household income it is the same today as it was a decade and a half ago."

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

How did our society get to a place where government has taken a back seat and where people are wary of government control? Stiglitz thanks the conservatives who have successfully touted false ideology about markets over the past 40 years. While they like to blame the government for inequality, Stiglitz notes that not even Adam Smith thought markets were anything beyond efficient. "Nobody ever said that they were fair, that they would lead to a distribution of income that was socially acceptable." Furthermore, he says, "many of the aspects of our inequality are a result of market failure. People who don’t have health insurance when they get sick wind up in extreme poverty and they can’t get health insurance because of a whole set of market failures." He says it's "striking that in spite of the fact that there is no intellectual basis for what you might call a 'Smithian' view that unfettered markets lead to efficiency," conservatives have marched ahead with this idea.

So why was there so much economic growth after World War II? Stiglitz says one reason is "the legacy of the Roosevelts, the legacy that government made a difference.” In making the case for government he also points out that "government has played an important catalytic role in a whole variety of other areas. If you think about our modern economy, you think about Internet, you think about biotech, you think about telecommunications and all of these things rest on government-funded basic research." He recalls a conversation with a Scandinavian finance minister who, when asked how his economy was so successful, answered "high taxes." Stiglitz took away that "if you’re going to have a well-functioning economy... you have to pay for what you get. You need to have a well-functioning government that provides education, infrastructure, research, technology, all these things, and we have to pay for it." Given that markets are not predictable nor interested in social problems, our government should stop bailing the financial institutions out and start investing in its people and the institutions that benefit them.

What you need to know to navigate today's most critical debates.

Click here to receive the Daily Digest via e-mail.

Why 2012 May Mark the End of an Era of Political Anger (TNR)

Roosevelt Institute Senior Fellow Mark Schmitt points out that if reelected, Obama has a chance to model FDR by using the calmness of second terms to create legislation that really tackles inequality.

Barriers to Change, From Wall St. and Geneva (NYT)

Gretchen Morgensen writes that financial institutions are still lobbying hard against change, and they have yet another trick up their sleeve: getting an agreement from the W.T.O to work in their favor.

Hurray for Health Reform (NYT)

Paul Krugman argues that the Affordable Care Act is effective and powerful legislation that cuts costs and provides health care for all people. So if you hear the buzzing of death panels and high costs, those are called (f)lies.

Goldman Op-Ed Shows Need for Volcker Rule, Democrats Say (Bloomberg)

For Democratic Senators, Greg Smith’s recent op-ed shows just how much institutions like Goldman Sachs need the Volcker Rule. Otherwise they'll have their cake, eat it, and eat yours too.

Buy a copy of The Unfinished Revolution: Voices from the Global Fight for Women’s Rights, featuring a chapter by Roosevelt Institute Senior Fellow Ellen Chesler.

If You Took the Greed Out of Wall Street, All You'd Have Left Is Pavement: Why Greg Smith's Critique is Way Too Narrow (Robert Reich)

Robert Reich explains that Goldman's brand of greediness is nothing new on Wall Street and that our government gave them the green light to cheat when it let financial institutions strip away regulations in the 1970s.

The Argument That Could Upend Wall Street Reform (WaPo)

Suzy Khimm writes that a Republican's concern about the Commodity Future Trading Commission's cost-benefit analysis could strengthen the financial industry's push for deregulation. Republican doesn't trust government; dog bites man.

That Wishful Thinking About Tax Rates (NYT)

Christina D. Romer argues against the Republican proposed tax policy that slashes benefits for millions of Americans and provides no evidence that continuing to lower rates, especially for the rich, works.

This Week in Poverty: Me, Mom and Reagan (The Nation)

Greg Kaufman shares from a new report that 40 percent of single mothers are in poverty and, thanks to Reagan, only one in ten receive cash welfare assistance. But social programs grow back after you cut them, right?

Senate Bill Could Roll Back Consumers' Health Insurance Savings (ProPublica)

Lena Groeger reports that a new Senate bill backed by health insurance companies would severely cut the amount of rebates customers would be owed as part of the new healthcare law of 2010. Apparently fairness doesn't generate enough profit.